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EIOPA published an Opinion on Sound Principles for Crisis Prevention, Management and Resolution Preparedness of National Competent Authorities (NCAs).
EIOPA notes that NCAs have been or are currently introducing changes in their Crisis Prevention, Management and Resolution Frameworks as a result of the financial crisis and initiatives by the international institutions (Financial Stability Board, International Association of Insurance Supervisors).
In order to ensure consistency and adequacy of those changes, EIOPA developed 14 principles that NCAs are expected to take into account. The principles are related to specific powers, tools and institutional features aimed to enhance crisis prevention, management and resolution preparedness of NCAs. The Opinion emphasises a range of issues including the organisational setup and the emergency plans for crisis prevention and management, the development of recovery and resolution plans, the need to design early warning systems and to define triggers for intervention, as well as to have adequate resolution powers and communication strategies in place. In the document EIOPA also stresses the need to cooperate and share information with other relevant authorities.
Gabriel Bernardino, Chairman of EIOPA, said: “By issuing this Opinion, EIOPA contributes to the creation of a solid and convergent system for preventing and managing financial crises in the EU. Later on, we will engage in a follow-up exercise with the NCAs to explore what actions have been taken in light of our Opinion. Only constant monitoring of new developments and adoption of new experience will allow us to reduce the likelihood and impact of potential future crises”.